Analyzing Tesco's Customer Loyalty and Reward Scheme Effectiveness

This report investigates the impact of customer loyalty and reward schemes, using Tesco as a case study. It begins with an introduction to the topic, outlining factors influencing research selection, and includes a literature review exploring existing research on customer loyalty programs and their effects on consumer behavior. The report specifies the research aims, objectives, and questions, along with the chosen research methodology, which includes a descriptive research design and an inductive approach. Data collection methods involve both primary and secondary sources, such as surveys and literature. The report presents findings, including data collected through questionnaires, and analyzes the relationship between customer loyalty programs and consumer choices. The conclusion and recommendations summarize the key findings, suggesting ways for Tesco to enhance its competitive advantage. The report also includes a Gantt chart for project management and a detailed analysis of the collected data, providing insights into customer satisfaction and purchasing behavior. Finally, it presents the data in tables, analyzing the frequency of responses to survey questions, and provides a comprehensive overview of the research process and its outcomes.

Does consumer loyalty and
rewards schemes actually
work?

Table of Contents
PART 1............................................................................................................................................1
1.1 Introduction......................................................................................................................1
1.2 Factors that contribute the research project selection.......................................................1
1.3 Literature review..............................................................................................................2
1.4 Research project specification..........................................................................................3
1.5 Gantt chart........................................................................................................................5
TASK 2............................................................................................................................................5
2.1 Resources which are required to carry out research.........................................................5
2.2 Research investigation......................................................................................................6
2.3 Record and collate data....................................................................................................8
TASK 3..........................................................................................................................................10
3.1 Research evaluation techniques......................................................................................10
3.2 Data analysis...................................................................................................................11
3.3 Conclusion and recommendations..................................................................................17
TASK 4..........................................................................................................................................18
Covered in PPT.....................................................................................................................18
REFERENCES..............................................................................................................................19

PART 1
TITLE: To identify the impact of customer’s loyalty and reward scheme on the choices of
people- A study on TESCO.
1.1 Introduction
Every enterprise performs their operations in more effective way so that they can fulfil
the needs and demands of the people. For this, companies are using different kind of strategies
and approaches so that they can achieve success in the market. The manager of an entity
conducts a research in the market so that they will be able to know about the different choices of
customers (Schumann, Wünderlich and Evanschitzky, 2014). They are using some of the
marketing activities so that brand awareness can be increased in the market. Along with this,
some firms are also using the reward scheme in order to attract them towards their services so
that their overall profitability level can be increased. The present report is based on the customer
loyalty and rewards scheme and how these may affect the choices of the people. Tesco is a retail
industry which perform their operations in UK. In the current report, some of the methodologies
are used by the researcher so that overall impact on service user’s choices can be identified.
Along with this, primary and secondary sources are used in order to collect the data from
different sources.
1.2 Factors that contribute the research project selection
Now a days, organizations are focusing on the different needs and requirements of
people. So, for this they conduct different kinds of surveys at the marketplace. There are some
loyal customers who purchase the services even if prices of the services are get increased. These
people are brand loyal who consume the goods only of their respective firm (Meyer-Waarden,
2015). There are some factors which are considered while conducting overall research project. In
order to complete the research in an appropriate manner, problem needs to be identified then
only success can be achieved. These factors play an important role in order to select an
appropriate research project so that aim and objectives can be achieved.
Customers choices can affect the operations and productivity level of organizations.
Companies have to more focused on the demands of the people so that their satisfaction level can
be increased. So, for this reason this topic has been chosen.
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When research problem in an effective manner than through this overall research
questions can be resolved. Along with the problem, there are some other factors which are vital
at the time selecting the project. People, phenomena and programs are also essential for the
project. On the basis of these, the overall research aim and objectives can be achieved. By
considering these, the research problem can be solved in more successful manner.
1.3 Literature review
There are many customers who prefer different products and services so it is the
responsibility of firm to fulfil the needs of people. Some organisations offer rewards and
incentives to their consumers so that their overall satisfaction level can be increased as this may
highly affect the choices of the people (Evanschitzky and et. al., 2012). In this, different authors
give their different opinions that how customers loyalty and rewards can affect their interests.
Through this, research gap can be identified in between the past and present project study.
Customers loyalty and rewards schemes
According to the views of Tanford, S., Raab and Kim (2011) there are some customers
who prefer to purchase products and services of one organisation rather than any other. For this,
some of the enterprises conduct programs at the marketplace so that they will be able to gain the
attention of the people. On the basis of these, retail industry will be able to retain their consumers
towards their services. So, in this manner overall competitiveness can be achieved as compare to
other rival firm. Kopalle and et. al., (2012) stated that some of the loyalty programs are
conducted by the manager of Tesco so that sales can be increased. This may affect the business
organisation in more positive manner as through this large customer base can be build.
Sometimes, loyalty programs provide special kind of membership to the people so that
they can access the new products. It has been analysed by Tanford, Raab and Kim (2012) that an
individual who has membership card they are liable to get some extra benefits or coupons.
Through this, the overall satisfaction among the people can be increased.
Customers choices
In this dynamic world, customer’s choices are changing from time to time so it is the
responsibility of manager to identify the changing needs and demands of people. As per the view
point of Gómez, Arranz and Cillán (2012) retail industry can use loyalty programs at the
marketplace so that customer’s attention can be gained. Brand loyal person will purchase
services from the respective organisation so company has to provide quality services with
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flexible prices. Through this, they can retain their service users and that can lead towards the
success.
Impact of customer’s loyalty programs on their choice
Dorotic, Bijmolt and Verhoef (2012) says that customer’s loyalty programs affect the
choices of an individual in positive manner as through this the overall sales can be increased.
There are some of the loyalty programs that are conducted at the marketplace and these are like
point system, tier system, membership card, non-monetary programs etc. These can lead an
enterprise towards success and high profitability. It has been analysed by Hafeez and
Muhammad (2012) that customer’s satisfaction is an important factor which can lead an
enterprise towards success. So, on the basis of the programs the overall satisfaction level of the
people can be increased in more effective manner. By using the loyalty concept, the long term
relationship can be established in between the customers and enterprise. So, in this manner the
choices of customers are get affected and this is beneficial for Tesco.
1.4 Research project specification
Aim: To identify the impact of customer’s loyalty and reward scheme on the choices of
the people- A study on TESCO
Research objectives: There are some of the research objectives of this current project
which are as follows:
 To identify the effectiveness of customer’s loyalty and reward scheme.
 To analyse the impact of loyalty programs on the choices of the customers.
 To determine the link between the loyalty programs and customer’s choices.
 To recommend some ways so that Tesco can gain the competitive advantage in the
market as compare to other competitors.
Research questions: Some of the research questions are stated below:
Q1. What is the effectiveness of customer’s loyalty and reward scheme at the workplace?
Q2. What is the impact of loyalty programs on the customer’s choice?
Q3. What is the relationship between consumer’s choice and loyalty programs?
Q4. What are the different ways through which competitive advantage can be gained?
Research methodology
Research methodology is a section which explain the different methods and tools that are
used by the researcher in order to complete the project in more successful manner (Flick, 2015).
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It is a kind of process through which overall questions can be resolved and due to this objective
can be achieved. On the basis of this, it can be analysed that how customer’s loyalty and reward
scheme can affect the choices of the people. It is the responsibility of researcher to select an
appropriate approach so that goals can be accomplished. These methods are as follows:
Research design: There are various research design techniques such as descriptive,
correlation, explanatory and so on. Here, in the present study descriptive has been used by the
researcher so that overall understanding of the loyalty programs and customer’s choices can be
understand (Smith, 2015). Through this, overall link between the factors and their impact on the
customer’s satisfaction level can be identified.
Research approach: Inductive and deductive research approaches are used in the
research projects. In the present report, inductive approach has been used so that different
theories can be formulate. On the other hand, in deductive the hypothesis is created and on the
basis of that overall goals can be achieved (Anney, 2014). Through this, the overall data can be
collected via questionnaire that how their choices are get influence through loyalty and rewards
programs.
Research philosophy: This helps the researcher in order to increase their knowledge
about the loyalty programs and customer’s choices. There are two types of philosophies such as
positivism and interpretivism (Bauer, 2014). In the current study, interpretivism has been used by
the researcher so that different human perception can be identified. Through this, accurate data
can be collected of the customer choices and their satisfaction level.
Data collection techniques: In the current research project, data has been collected
through primary sources such as surveys, observation and interviews. In primary, survey is
conducted at the marketplace in order to identify the needs and demands of people. Along with
this, information is also collected from secondary sources via books, journals, articles, internet
(McCusker and Gunaydin, 2015). So in this manner, it can be identified that how customer’s
choices are get affected by the loyalty programs.
Sampling technique: Sampling is a kind of technique that is used in order to extract a
small sample from large population and overall research will conduct on the sample. Here, in the
current research random sampling technique is used so that different views or opinions can be
identified (Kilpatrick, 2014). Along with this, 20 sample size has been selected for this current
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research project in order to identify the views of customers. By conducting the research on these
respondents, the research aim and objectives are get accomplished.
Data analysis: It is a kind of process that is used by researcher in order to analyse the
data on the basis of qualitative method (Hyett, Kenny and Dickson-Swift, 2014). In this, thematic
analysis is used where different themes are formed with their graphs. So, in this manner overall
data or information can be interpreted.
1.5 Gantt chart
In this section Gantt chart is so that overall plan can be implemented in more effective
manner. On the basis of this kind of chart, it can be analysed that how different activities are
going to be followed in an effective manner.
Activities/ Weeks 1 2 3 4 5 6 7 8 9 10 11 12
Research proposal
Formulate research aim and
objectives
Literature review
Research methodology
Questionnaire
Data analysis
Conclusion
Recommendations
Final submission
TASK 2
2.1 Resources which are required to carry out research
Some resources are used by researcher in order to complete the project in an efficient way
so that overall goals can be achieved. Primary and secondary sources are there through which
authenticate information can be gathered. Surveys like interview, questionnaire, focus group,
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observation and so on. By using these, the views of different respondents can be identified so
their needs can be fulfilled in more effective manner. Apart from this, secondary resources are
related to the books, articles, journals, research papers, internet etc. Here, in the current field of
study, data has been collected from different text books, recent journals and e-learning. By
performing such activities, specified goals can be accomplished in an effective way or an
effective conclusion can be drawn.
Along with these, there are some other resources also which help the researcher in order to
carry out further study (Ha and Stoel, 2014). These are like financial, physical and human.
Financial are related to the cost, expenses, capital and human resources are the people who
contribute in order to complete the project. It is the responsibility of researcher to utilise these
resources in an efficient way so that an effective outcome can be achieved.
2.2 Research investigation
An investigation has been performed by researcher on the basis of questionnaire. In this,
some open ended and close ended questions have been asked to customers so that their opinion
can be evaluated (Thompson and Chmura, 2015). The sample size which is selected for this field
of study is 20 and survey is conducted on customers. Some questions are asked to them so that it
can be determined that how rewards programs can affect the choices of different people. The
questionnaire is stated below:
Questionnaire
Name:
Age:
Gender:
Q1. Do you purchase products from Tesco?
 Yes
 No
 Don’t remember
Q2. How often you visit the retail industry?
 Once in a week
 Twice in a week
 Once in a month
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 Twice in a month
Q3. Are you satisfied with the services that are offered by Tesco?
 Highly satisfied
 Satisfied
 Neither satisfied nor dissatisfied
 Dissatisfied
 Highly dissatisfied
Q4. What factors motivates you more in order to buy the services from Tesco?
 Past experience
 Advertisements
 Membership
 Reward scheme
 Others
Q5. What kind of factors affect your choices more?
 Variety of products
 Price
 Loyalty cards
 Quality
Q6. Have you ever contact to our customer service centre?
 Yes
 No
 Don’t remember
Q7. Do you think that loyalty programs and rewards scheme can influence your choices?
 Definitely will
 Probably will
 Might or might not
 Probably will not
 Definitely will not
Q8. Based on your awareness about company’s products, is it better than other brands?
 Much better
 Better
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 About the same
 Worse
 Much worse
Q9. On the basis of your experience, will you recommend the services of Tesco to your friend
and family members?
 Very likely
 Likely
 Neutral
 Unlikely
 Very unlikely
Q10. Recommend some strategies to Tesco so that they will be able to sustain their
competitive advantage at the marketplace?
___________________________________________________________________________
2.3 Record and collate data
The information which is gathered from different respondents can be analysed and
formulated in the table with their frequency (Tahal, 2014). Through frequency table, it can be
interpreted that how many people are agreed or disagreed with the services of Tesco. By
conducting this type of survey, relationship between customer’s loyalty and their choices can be
investigated. So, in this way more authenticate and reliable information can be collected in an
effective way.
1. Do you purchase products from Tesco? Frequency
Yes 12
No 6
Don’t remember 2
2. How often you visit the retail industry? Frequency
Once in a week 8
Twice in a week 6
Once in a month 2
Twice in a month 4
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3. Are you satisfied with the services that are offered by Tesco? Frequency
Highly satisfied 7
Satisfied 4
Neither satisfied nor dissatisfied 2
Dissatisfied 5
Highly dissatisfied 2
4. What factors motivates you more in order to buy the services from
Tesco?
Frequency
Past experience 6
Advertisements 3
Membership 3
Reward scheme 6
Others 2
5. What kind of factors affect your choices more? Frequency
Variety of products 7
Price 3
Loyalty cards 4
Quality 6
6. Have you ever contact to our customer service centre? Frequency
Yes 10
No 4
Don’t remember 6
7. Do you think that loyalty programs and rewards scheme can Frequency
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influence your choices?
Definitely will 8
Probably will 3
Might or might not 2
Probably will not 4
Definitely will not 3
8. Based on your awareness about company’s products, is it better
than other brands?
Frequency
Much better 8
Better 4
About the same 3
Worse 2
Much worse 3
9. On the basis of your experience, will you recommend the services of
Tesco to your friend and family members?
Frequency
Very likely 6
Likely 4
Neutral 4
Unlikely 3
Very unlikely 3
TASK 3
3.1 Research evaluation techniques
Evaluation is a process that can be used by an individual so that overall project can be
completed in more successful way. There are various research evaluation techniques that has
been used by researcher in order to identify the impact of customer’s loyalty programs and
rewards scheme on their choices. Qualitative and quantitative are two research approaches. In the
current field of study, qualitative approach has been used so that human perceptions can be
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